Term Deposit


Term Deposits are cash deposits with a financial institution that attract a fixed interest rate and are deposited for a fixed time period. Withdrawing the deposit before the defined expiry date (maturity) usually incurs a penalty fee or a reduced interest rate.

The interest can be paid periodically (i.e. monthly) or at the end of the term. Some banks offer interest payment at the time of deposit.

Term deposits attract higher interest rate than on-call (avista) deposits because the funds are tied for a fixed period. The periods range from one month to several years. Term deposits are easily available and quickly set up making a preferred option for conservative investors.

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